Man defrauds the IRS and Seventh Circuit Affirms His Punishment

In 1997, Brian Wasson co-founded Midwest Alternative Planning to market and sell sham trusts through what was once Aegis Co. Clients would pay Aegis $20,000 to $40,000 plus annual fees to set up overseas trusts for them to reduce their tax liability. Over ten years, the Aegis system eliminated more than $60 million in tax liability nationwide.

In 2000, the IRS discovered the scheme during a criminal investigation. In September 2006, Wasson was indicted for aiding in the filing of a false tax return. The indictment was superseded twice to include Wasson’s two business partners and charge the trio with conspiracy to defraud the IRS. There were extensive delays throughout the trial, but U.S. District Judge Michael McCuskey noted the complex nature of the case and did not add all of the delay periods to the total trial time.

When one of the three partners from the indictment died of cancer, and another pleaded guilty, both parties sought continuances. During the March 2009 trial, Wasson insisted that their system was legal, but the district court rejected Wasson’s good-faith defense and held that he was guilty of all charges. Wasson was sentenced to 15 years in prison and three years of supervised release under the 2008 guidelines. He was denied bond while the case was being appealed. On appeal, he attacked the delays in trial and argued that the indictment should be set aside under the Speedy Trial Act.

The 7^th Circuit rejected Wasson’s two claims. The court could not see how Wasson was even prejudiced by the continuances. The court also affirmed Wasson’s sentence under the 2008 requirements even though it led to a four –level increase in Wasson’s offense level.

See Joe Celentino, Court Won’t Let Tax Fraudster Skate Away, Courthouse News Service, May 24, 2012.

Special thanks to Ike Z. Devji (J.D.; Executive Vice-President, The Wealthy 100; Of Counsel Lodmell & Lodmell, P.C.) for bringing this article to my attention.